Excellent question, Julia. You’re certainly not the only one seeking clarity on this subject.
Long-term care insurance (LTC) is a relatively new product (the first policies were sold in the 1970s) that pays for nursing home and at-home care.
More specifically, LTC provides financial help to individuals who need assistance with what are known as the ‘activities of daily living,’ such as getting out of bed, dressing, eating, bathing and using the toilet. Because such assistance can be quite costly over the long term, LTC insurance can provide a valuable financial buffer.
The benefits of LTC insurance aren’t just financial—they’re also psychological, both for the recipient of the care and for his or her loved ones; LTC ensures that families have what they need to care for loved ones—while helping those affected maintain their dignity long term.
Moving on to the second part of your question—” why is it important for me to have it?” LTC insurance is a great buy for many people, but doesn’t make sense for everyone. For example, wealthy individuals who can pay for care on their own do not need insurance. Conversely, for those with little money, Medicaid will pay for long-term care expenses.
The Insurance Information Institute, which represents the insurance industry, sums it up nicely: “Unless you have so little money that you will qualify for Medicaid, or so much money that you can pay the bills out of your own pocket, you should consider buying long-term care insurance.“
Please note: InsureMe Answers is not intended to be a substitute for advice from a licensed professional. For specific questions about a policy or claim, please contact your insurance agent or company.